Colstrip owners write bills putting plant’s future in doubt

Three of the six utilities that own southeastern Montana’s Colstrip power plant have helped write legislation in Washington state and Oregon that could threaten future operations of the second-largest coal-fired plant in the West.

That has started a debate among Montana lawmakers on whether to focus on protecting a major state employer and economic driver or to lobby Washington state’s Legislature to create a fund to lessen the blow of a potential partial shutdown of Colstrip.

“We’re in a war,” said state Sen. Jim Keane, D-Butte, of protecting Colstrip’s workers and community. “I’m not going to Washington on my knees to say please put this in the bill.”

Colstrip, which is actually four power-generating units producing 2,100 megawatts of electricity, is under pressure from a weak coal market, increasing federal regulation and lawsuits. It is owned by six utilities that are headquartered in other states, and only one – NorthWestern Energy – uses Colstrip electricity to power homes and businesses in Montana.

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Puget Sound Energy, Colstrip’s largest owner, wrote a bill introduced Tuesday in the Washington Legislature that would allow the utility to buy out Talen Energy’s interest in the plant’s newer Unit 3, on the condition that it move to decommission the two oldest units. The bill comes after Washington lawmakers last year rejected legislation calling for Puget Sound Energy to shut down Units 1 and 2.

In Oregon, Portland General Electric and PacificCorp. – two more Colstrip owners – helped write legislation to wean that state off coal-produced electricity by 2035. The final version of that bill is now being drafted for the upcoming Oregon legislative session, said Rep. Jessica Vega Pederson, D-Portland, chairwoman of the Oregon House Energy and Environment Committee.

Vega Pederson and lawmakers from Washington state presented the proposals to Montana’s Environmental Quality Council on Wednesday.

Washington Sen. Doug Ericksen, R-Ferndale, the chairman of Senate Energy, Environment and Telecommunications Committee, said his state’s legislation could change over the course of the legislative session and he plans to listen to what Montana officials have to say.

“We will work together to get a solution that benefits both states,” he said.

Ericksen met with a Montana delegation last year over worries about the earlier proposal to shut down the 1970s-era Colstrip Units 1 and 2. Puget Sound Energy owns 50 percent of those units, while Talen Energy owns the other half.

Last year’s failed bill called for Puget Sound Energy to buy out Talen and shut down the units. The new bill would allow Puget Sound Energy to buy Talen’s 30 percent ownership interest in Colstrip Unit 3, giving Puget Sound 55 percent ownership, on the condition that it works toward shutting down the two older units.

The best thing to do is to cut the best deal we can for the citizens of Colstrip.

Montana Rep. Ed Lieser, D-Whitefish

Oregon’s legislation would prohibit the state from using electricity from Colstrip by 2035, but the Oregon utilities could sell the power to other customers or on the open market, Vega Pederson said.

Montana made the decision long ago to allow out-of-state utilities to own Colstrip, and the plant’s future is largely out of the state’s hands, said Anne Hedges, deputy executive director for the Montana Environmental Information Center.

“If we want to have a say in how the closure of Colstrip occurs over the next 20 years, the time is now to step up,” Hedges said.

Montana Rep. Ed Lieser, D-Whitefish, said the state has little leverage to influence the out-of-state legislation. He backed a recommendation by Rep. Janet Ellis, D-Helena, that state officials focus on lobbying Washington state lawmakers to include a site cleanup and job-training package in its bill.

“The best thing to do is to cut the best deal we can for the citizens of Colstrip,” he said.

But Keane and Republican Sens. John Brenden and Rick Ripley said the focus must be on protecting the plant. Rep. Kerry White suggested a bill in the 2017 session to buy Colstrip with money from the state’s coal severance tax fund.

If the Washington state bill passes, Montana lawmakers would call their own special session to force those utilities to pay the costs of cleanup and job training, Keane said.

The committee voted to send Keane and Ripley to Olympia to testify on the Washington state bill.